Author: Investa

In recent years, ESG investing has gained significant traction and attention. ESG stands for Environmental, Social, and Governance, and it represents a paradigm shift in the world of finance. 

How does this relate to the financial markets? Will it have an effect on how I invest in the near future? Let’s dive into these and more.

What is ESG Investing?

ESG investing is an investment approach that considers Environmental, Social, and Governance factors alongside financial criteria when evaluating and selecting investments. 

These three pillars represent a framework for assessing the sustainability and societal impact of a company or investment.

1. Environmental (E)

The “E” in ESG focuses on a company’s environmental practices and its impact on the planet. Investors consider factors such as a company’s carbon footprint, energy efficiency, resource conservation, and commitment to environmental sustainability. Companies that prioritize reducing their environmental impact are typically favored in ESG investing.

2. Social (S)

The “S” in ESG takes into account a company’s social responsibility and how it treats its employees, customers, communities, and other stakeholders. This aspect evaluates diversity and inclusion, labor practices, community engagement, and product safety. Companies that prioritize social responsibility and ethical practices tend to perform well in this category.

3. Governance (G)

The “G” in ESG examines a company’s corporate governance structure, including its board composition, executive compensation, shareholder rights, and transparency in financial reporting. Strong corporate governance ensures ethical decision-making and reduces the risk of fraud or misconduct.

Why Does ESG Investing Matter?

While it might seem mundane to some, ESG investing matters for several compelling reasons:

1. Alignment with Values

ESG investing allows individuals and institutions to invest in companies that align with their ethical and moral values. It enables investors to support businesses that are committed to positive social and environmental change.

2. Risk Mitigation

Companies with strong ESG practices tend to be better equipped to manage risks related to environmental, social, and governance issues. By investing in such companies, investors can potentially reduce their exposure to risk.

3. Long-Term Performance

Numerous studies suggest that companies with strong ESG performance may perform better in the long run. The assumption here is that sustainable business practices can lead to improved financial performance and resilience. While the past years have been brutal for all funds alike, some results have shown that ESG investing has the potential to fare better yields.

4. Impactful Change

ESG investing encourages companies to adopt sustainable and responsible practices. Investors can play a role in driving positive change by supporting companies that prioritize ESG factors.

How to Incorporate ESG to Your Investments

If you’re interested in ESG investing, here’s how you can get started:

1. Educate Yourself

Begin by learning about ESG principles and how they apply to investments. Understand the specific ESG criteria that matter most to you.

2. Assess Your Values

Identify your personal values and priorities. What environmental, social, and governance issues are most important to you? This will help you align your investments with your beliefs.

3. Research Investments

Look for investment options that meet your ESG criteria. Many financial institutions offer ESG-focused funds and portfolios. You can also use ESG ratings and research tools to evaluate individual companies.

4. Diversify Your Portfolio

As with any investment strategy, diversification is key! Avoid putting all your funds into a single investment. Try to spread your investments across different asset classes and industries.

5. Stay Informed

Keep up with the latest developments in ESG investing and the performance of your investments. As the ESG landscape evolves, your investment choices should also be adjusted.

Conclusion

ESG investing represents a progressive and conscientious approach to investing that goes beyond financial returns. By considering environmental, social, and governance factors, ESG investors aim to make a positive impact on society and the planet while potentially achieving strong financial results. 

Whether you’re motivated by personal values or a desire to mitigate risk, ESG investing offers a unique opportunity to invest with purpose and contribute to a more sustainable and ethical future.

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When it comes to building wealth, compound interest is the most powerful tool you’ll have, All of the richest people you’ll ever know about will all have made use of compound interest.

But what exactly is compound interest, and how can it help you grow your wealth over time? Let’s dive into understanding what it is, and how you can use it to your advantage!

What is Compound Interest?

Compound interest is the eighth wonder of the world. He who understands it, earns it. He who doesn’t, pays it.

– Albert Einstein

At its core, compound interest is the interest you earn not only on your initial investment or deposit but also on the interest you’ve previously earned. In simple terms, it’s “interest on interest.” This compounding effect can turn even modest contributions into substantial wealth over time. Rather than growing your money linearly, it will allow you to grow it exponentially.

Employing compound interest is also straightforward. Invest your money, and keep on reinvesting your profits.

Things to Take Note of

Here are some important things you need to take note of:

1. Time is Your Ally

The longer your money is invested, the more significant the impact. Starting early allows you to maximize its benefits. Even small, regular investments can lead to substantial wealth accumulation over time.

2. The Rate Matters

The rate at which your money compounds (the annual interest rate) significantly affects your earnings. A higher interest rate results in faster growth, while a lower rate will require more time to achieve the same results. Of course, there are also risks involved with investments that offer higher yields. Don’t worry though, starting with even just a small rate of return is better than not starting at all.

3. Compounding Frequency

The more frequently interest is compounded, the greater the effect. Common compounding periods include annually, semi-annually, quarterly, and monthly. The more frequent the compounding, the more your money grows.

Tips to Fully Harness the Power of Compound Interest

Now that you understand the power of compound interest, here are some tips to make the most of it:

1. Start Early

As mentioned, the earlier you begin investing, the more time your money has to compound. Make consistent contributions to your investments over the long term, and do it as frequently as you can. The importance of starting early cannot be overstated, which is why you’ll often hear it as well from others.

2. Invest Wisely

Choose investments that offer competitive yields and have a history of consistent growth. Make sure to know about the risks involved. Always remember that higher yields usually come with higher amounts of risk. But, if you’re savvy enough you can utilize higher yield investments while still managing your risks well. Of course, keep in mind to diversify your portfolio as well.

3. Reinvest Earnings

Instead of cashing out your earnings, reinvest them to take full advantage of compound interest. This is what allows your money to grow exponentially over time.

5. Avoid High-Interest Debt

While compound interest can work in your favor when investing, it can work against you when you have high-interest debt. Prioritize paying off high-interest debts to reduce interest expenses. Or even better, try to be as debt-free as you can.

Moving Forward

Compound interest is a powerful tool that can help you build wealth over time. It rewards those who start early, invest wisely, and allow their money to grow over the long term. By understanding the mechanics of compound interest and implementing the right strategies, you can secure a brighter financial future and achieve your wealth-building goals. 

Remember, time is your greatest ally when it comes to harnessing the incredible power of compound interest. Start today, and watch your wealth grow exponentially over the years!

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The financial landscape is evolving at an unprecedented pace. To succeed in this new era of wealth, you need to stay informed, adapt, and thrive. 

The Investa Summit 2023 is Investagrams’ flagship event. Every year we gather the best and most inspiring individuals in across industries. It is designed to show Filipinos that we need to be ready for new opportunities, new trends, and a new era of wealth. With over 7 successful summits previously held in the Philippines and Singapore, this time we are bringing in more value, more learnings, and definitely more impact to the lives of our attendees. 

Investa Summit 2023 will cover a wide range of topics that are shaping the future of wealth creation:

• How To Stay Prepared and Spot The Next Bull Market
• The Rise of Digital Banks: A Paradigm Shift in Financial Services
• Innovation and Disruption: Running a Business in a Rapidly Changing Business Environment
• Building Wealth for the Future: Key Principles of Financial Planning
• The Power of AI: How to Take Advantage of AI to Drive Profitable Business Growth

Investa Summit 2023 Speakers

This event will feature a lineup of industry-leading experts who will share their knowledge and experiences. Some of the speakers include JC Bisnar of Investa, Akio Kashiwagi of Money Growers, Nikki Yu of Awesome 10x and RJ Ledesma of Mercato Centrale. We’ve gathered experts from the world of trading, business, real estate and more to provide a holistic experience on what the world of finance is today. 

Meet Everyone IN-PERSON!

For the first time in three years, we’re going live! Our physical event will be held on Saturday, October 21, 2023, at the AIM Conference Center in Makati, Metro Manila. This exclusive gathering is open to VIP Ticket Holders who will also have access to the online event.

For those attending the physical event, you can get to witness panel discussions from the best and the brightest about the state of the market today and the future of the Blockchain industry. You can also meet industry-leading experts and be able to network and meet them all together in one space. 

Investa Summit 2023 offers you the opportunity to gain invaluable knowledge and insights that can shape your financial future. 

Be ready for new opportunities, new trends, and new shifts in mindset. 

Be ready for the New Era of Wealth. 

Get your tickets at investagrams.com/investasummit

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Investing in the stock market can be both exciting and intimidating, especially for beginners. There are countless metrics and indicators to consider when evaluating potential investments. One such indicator that can provide valuable insights for novice investors is a stock’s relative strength. 

Popularized by renowned market wizards such as William O’Neil and Mark Minervini, a stock’s relative strength can let you know which stocks are of higher quality through price action.

Let’s dive into relative strength and how it can help traders perform better!

Understanding Relative Strength

Not to be confused with the RSI, a stock’s relative strength compares its performance to a broader market index. This comparison helps investors gauge how well a particular stock is doing in relation to the overall market.

In portfolio management, this can be likened to a stock’s alpha. The higher the alpha or relative strength, the stronger a stock has been compared to the market as a whole.

Why a Stock’s Relative Strength Matters

“I made 99% of my profits in the stock market by trading in leading names.”

– Mark Minervini

One of the primary reasons investors look at a stock’s relative strength is to identify if it outperforms versus others. When a stock consistently shows strong relative strength, it suggests that the company is doing better than others in the same industry or sector. This can be a promising sign for traders and investors.

Furthermore, a stock’s relative strength really shines during market retracements. A stock with strong price action during a broad retracement indicates the potential to be a market leader. This is due to the fact that when the market experiences downturns, fund managers will usually cut off lower quality stocks first. In effect, higher quality stocks will experience a weaker selldown which causes them to have a high relative strength reading. 

Using Relative Strength in Your Investment Strategy

Now that you understand what relative strength is and how to calculate it, here are some practical ways to incorporate it into your investment strategy as a beginner:

• Screening for Strong Performers: As you regularly screen through the market, you can make it a habit to look for stocks that have a high relative strength or appear to be stronger than others. When the market is rallying, the stock shouldn’t be lagging behind others. On the other hand, as other stocks break below support levels during market turns, the stock should be staying strong above key levels. These stocks may be worth considering as top options for your investment portfolio.

• Confirmation of Buy or Sell Signals: When you’re considering buying or selling a stock, check if it’s significantly lagging behind other stocks. It’s normal to break out or rally a bit later than the broad market. However, if the delay is significantly long, it may be a sign that the stock’s relative strength is low.

Conclusion

Relative strength is a valuable tool for anyone, from beginners to experts, in the world of investing. It provides a simple yet effective way to assess a stock’s performance compared to benchmarks. By understanding and using relative strength, you can make more informed investment decisions as you add an extra layer to your stock picking criteria.

Remember that while stock’s relative strength is useful to know, it isn’t the holy grail of trading. It should always be used as a tool within your strategy.

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For many who are just starting to learn how to trade, the cost of learning comes into play. “Bilhin ko ba libro na ‘to?” “Sulit kaya pumunta sa event sa November?” Aminin mo na – a lot of us want to keep costs low, especially when it comes to learning new things. While you can save on some costs, trading events are something you shouldn’t miss.

It’s a whole different experience when the lessons are taught live

The speakers most likely already have free material on the internet. They might even have youtube videos that cover a variety of topics. However, trading events give speakers much more freedom to fully express their wisdom. 

If you watch how they teach during, you’ll notice that a lot more nuances are covered. More details are usually discussed. Emotions are also brought out which could give more emphasis. Speakers also become more able to gauge how well the audience understands the lesson. In contrast, there’s a disconnect when creating online material since there’s no real-time feedback.

Speakers can directly address questions

Live discussions can be held between learners and speakers. Attending trading events live holds the advantage of allowing for real-time interactions. Since speakers can gauge the audience’s understanding, trading events enable direct communication, fostering an environment where questions can be asked, discussions can take place, and ideas can be exchanged. This active engagement not only enhances your understanding but also encourages critical thinking and collaboration.

You’ll notice that trading events capture your full attention

When consuming online content, you’ll notice that distractions are everywhere. By attending live trading events, you’ll be put into a better ambiance to learn from the wisdom of others. The physical presence of both presenters and fellow attendees creates an atmosphere conducive to focused learning. You can fully immerse yourself in the content without the temptation to multitask or drift away.

Best of all, you can meet like-minded people

It can’t be stressed enough how important it is to build your network. In any field, being able to talk with others allows you to gain knowledge and experience faster. Attending trading events provides you with a unique platform for networking. You’ll have the opportunity to connect with others and even create communities. Fun fact: some communities started from interactions between traders during events!

Is it worth-it to attend trading events?

Online content has undoubtedly been a game-changer for learning. However, face-to-face events still hold a lot of value in learning new skills. The real-time interactions, ambiance, and overall experience are things that online learning just can’t replicate. Trading events are definitely something you should look forward to attending from time to time.

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Managing personal finances is essential to have financial stability and avoid spending beyond your budget. Creating a budget sheet may help you to be frugal and be responsible with your finances. 

This article delves into the significance of expense tracking and guides you through the process of creating an effective budget sheet.

The Significance of Tracking Expenses

Everyone knows the line “with great power comes great responsibility.” This applies to our own finances as well. Either through an allowance or when you start earning a salary, the freedom to spend as much as we want can cause us to overspend.

Even just tracking daily expenses through your phone can help you a lot! You’ll find out where your money goes, and you can better assess where you should focus your funds on.

To track your expenses, what you can do is to gather all your financial records, such as receipts and bank statements. Create categories for your expenses, such as groceries, transportation, entertainment, and utilities. Utilize spreadsheets, budgeting apps, or even pen and paper to record every transaction accurately. By consistently updating this record, you’ll be able to observe patterns, identify areas of excess, and make necessary adjustments.

How to Create Your Budget Sheet

Once you’ve listed down your monthly expenses, The next step is to create a comprehensive budget sheet. A budget is a roadmap for your financial journey, ensuring that your resources are allocated accordingly. Here’s how you can go about creating an effective budget sheet:

1. Determine Your Income: Calculate your monthly income from all sources. This includes your salary, allowances, and any additional income streams. 
2. List Fixed Expenses: List down your fixed monthly expenditures, such as rent, mortgage payments, insurance premiums, and loan repayments. These are non-negotiable expenses that need to be accounted for.
3. Categorize Variable Expenses: Categorize your variable expenses, like groceries, dining out, transportation, entertainment, and shopping. 
4. Allocate Savings: Dedicate a portion of your income to savings and investments. This is crucial for building an emergency fund and securing your financial future.
5. Set Financial Goals: Define short-term and long-term financial goals. Allocate funds towards these goals within your budget, such as paying off debt, buying a car, or saving for a vacation.
6. Calculate the Difference: Subtract your total expenses, including fixed and variable costs, from your income. A positive difference indicates that you’re living within your means, while a negative one highlights potential overspending.
7. Adjust and Refine: Regularly review and adjust your budget to align with changing circumstances. Life events like pay raises, new expenses, or unexpected costs may necessitate modifications to your budget sheet.

Keep In Mind

In a world dominated by consumerism and financial intricacies, being responsible with your finances is not just a choice, but a necessity. Tracking your expenses and creating a budget sheet serve as the pillars for achieving financial stability and realizing your dreams. By Embracing budgeting practices, you embark on a journey towards financial freedom, allowing you to manage your money rather than letting it manage you.

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Many of us know that having an emergency fund is essential. Yet, not a lot of us understand why it’s important to have one. Life is full of unexpected twists and turns, and an emergency fund can serve as your safety net. 

Here are the top reasons why you NEED to have one.

Financial Protection in Uncertain Times

This reason is what many of us know. Life is unpredictable, and no one can predict when a financial crisis may arise. Whether it’s a global economic downturn, a family emergency, or an unexpected natural disaster, having an emergency fund can help you weather the storm without derailing your long-term financial goals. It serves as a cushion, protecting you from having to rely on credit cards or loans in times of need.

Stress Reduction and Peace of Mind

Financial stress can be very overwhelming at times. Sometimes you’ll feel like you’re not yet secure. Other times, it might feel like you haven’t progressed at all. Having an emergency fund can allow you to have peace of mind. Aside from knowing that you have something to turn to during crises, you can also treat it as your progress bar. Being able to look at how much you’ve been able to set aside can you let know for yourself how well you’re able to handle your finances – and how capable you can be should emergencies arise. 

Emergency Funds Prevent Debt

An extension of being secured during tough times, emergency funds also help you to stay away from debt. Without an emergency fund, people usually resort to borrowing money. For many low-income earners, this usually means continuously taking debt. High-interest rates and mounting bills mount up until they become hard to manage. Having an emergency fund ensures that you won’t have to accumulate debt during challenging times and can maintain financial independence.

Faster Recovery from Financial Setbacks

With an emergency fund in place, it becomes easier to handle setbacks. You wouldn’t need to restart having to save up for a business. You wouldn’t need to tap into long-term investments. Of course, you have to build up your emergency fund again. However, the setback won’t cause serious harm to your life, and your investments. 

Flexibility in Career Decisions

Having an emergency fund can offer the freedom to pursue various career opportunities. You won’t be afraid of being jobless for a few months because you know that you already have a safety net. On the other hand, living paycheck to paycheck can have a big impact on your flexibility since having a steady stream of income becomes a necessity for you.

Should you have one?

The importance of an emergency fund cannot be overstated. It is a fundamental aspect of responsible financial planning and provides security and stability in the face of life’s uncertainties. By having one, you are taking a proactive step towards safeguarding your financial future and ensuring that unexpected events don’t disrupt your overall financial well-being. 

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